| Date: |
25-11-2014 |
| Subject: |
Government may find ethanol fix for liquor, oil companies |
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NEW DELHI: The battle for alcohol between the liquor industry and oil companies is likely to end. The government plans to allow petrol blending with ethanol produced from non-edible plants.
Currently, ethanol produced from sugarcane is the only source for blending, which makes it scarce for alcohol and chemicals manufacturing. The oil ministry has recently moved a proposal for the Cabinet to allow blending petrol with cellulosic ethanol produced from biomass such as switchgrass, paper pulp, sawdust, municipal waste and non-edible parts of plants.
This would be an alternative to ethanol made from molasses, a byproduct of sugar manufacturing, government officials said. This would help in reducing India's dependence on energy imports, keep cities and villages clean and avoid confrontations with liquor and chemical industry, executives in oil companies said. The government had launched sale of ethanol blended petrol in 2003 and gradually made 5% blending mandatory in 20 states and four Union Territories, subject to availability of the biofuel.
But, domestic produces could only meet less than one-third of the 115 crore litres ethanol demand in 2013-14 to meet 5% blending target at reasonable cost. Import of the produce did not make commercial sense because cost of ethanol would have doubled, officials said. The liquor manufacturers said there is an ethanol demand and supply mismatch.
"The supplies are just sufficient for alcohol and chemical industry," said Confederation of Indian Alcoholic Beverage Companies director general Pramod Krishna. Liquor industry executives said the fight for ethanol was pushing up its price and the biggest gainer is the sugar lobby. "Price of ethanol with 94% alcohol has seen a rise of 20% to Rs 41-42 a litre since the past few months. Sugar industry says they are passing the benefit to farmer which we don't think is happening," an executive said requesting anonymity.
The sugar industry has been asking government to increase ethanol blending from 5 to 10%, food ministry officials said. "The industry is not even able to blend 5% ethanol. Let them reach here and then we will see," a food ministry official said. Indian Sugar Mills Association spokesperson said potable liquor is the main contributor to any state exchequer, hence the supplies of alcohol is assured to the potable liquor industry.
"We are not aware of any development whether the government is planning to allow manufacturing of ethanol from any source other than sugarcane. At present, the demand of all the three sectors is comfortably met from indigenous alcohol/ethanol. The domestic ethanol manufacturers are capable to meet the demand of ethanol by the OMCs for 5% blending with petrol at which the total requirement would be approximately 105 crore litres," the spokesperson said.
Source : economictimes.indiatimes.com
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